When asked about Watson's future, Clarke said: "It is up to the selectors to make that decision."
Australian chairman of selectors Rod Marsh said dropping Watson was a tough call.
"But it's one we thought we had to make, because in Shane's last 10 one-day games, he's got 220 runs at an average of 22," Marsh said.
"Unfortunately he's been getting starts, but he hasn't been going on with it.
"We had to fit James in, and someone had to go."
Twitter seemed to react postively to the news that Watson was dropped.
First the word was that Mitchell Marsh was being dropped by James Faulkner, which angered the Watson haters.
Then when it became official that struggling Watson was missing the game, the Tweets began to flow.
Faulkner made just seven in his innings as Australia reached 417 for six from 50 overs.
